Costs consequences of obstructive conduct: A reminder for charities protecting legacy gifts

A recent High Court decision provides an important reminder of the court's willingness to protect charitable beneficiaries where estate administration is frustrated by unreasonable conduct.

The case concerned an estate in which a charity was entitled to a share of the residuary estate under the deceased's Will. What should have been a relatively straightforward administration became a protracted dispute lasting almost seven years, requiring the appointment of an independent administrator and multiple court applications before the estate could finally be distributed.

The estate's principal asset was a residential property and the charity's entitlement represented 30% of the residuary estate. The administration became delayed by disputes as to whether the charity in fact the intended beneficiary (will interpretation issues), unreasonable jurisdictional challenges and a series of allegations and objections that were ultimately not pursued successfully.

Of particular interest to charities is the court's treatment of costs.

We argued, on behalf of the charity, that the conduct of the litigant in person had been "persistently obstructive", "highly unreasonable" and had caused significant delay and expense. The court accepted that various challenges had been raised which were described as "wholly without merit" by the Court, including an unsuccessful jurisdiction challenge and an attempt to appeal that decision.

Furthermore, we stated that indemnity costs were justified because the conduct fell well outside the norm, pointing to repeated unmeritorious objections, failure to engage constructively with the administration of the estate, lack of cooperation with the independent administrator and conduct that delayed distribution of the estate in accordance with the deceased's wishes.

The court agreed.

In its final order, the court directed that the litigant in person pay:

• The independent administrator's costs of £100,000 on the indemnity basis; and
• The charity's costs of £48,000, also on the indemnity basis.

Importantly, this was in addition to another order (in the original proceedings) where the charity recovered 100% of its litigation costs claimed in the original litigation which resulted in the litigant in persons removal which were over £135,000.

The order provided that the litigant would receive no distribution from the estate unless the costs liabilities had first been satisfied in full.

Why does this matter for charities?

Charities frequently encounter situations where estates are delayed by disputes, challenges to Wills, objections to administration decisions or difficult interactions with beneficiaries and family members. While charities are often rightly cautious about becoming involved in litigation, this decision demonstrates that the court is prepared to make robust costs orders where unreasonable conduct causes unnecessary expense and delays the fulfilment of a donor's wishes.

The case is also a useful reminder that:

• The court expects estate administration to proceed efficiently and proportionately.
• Litigants in person are not immune from adverse costs consequences.
• Repeated meritless applications and obstructive behaviour may justify indemnity costs.
• Charities can, where appropriate, seek recovery of the full costs incurred in protecting their entitlement.

For legacy teams, the decision reinforces the value of taking a firm and pragmatic approach where estate administration is being impeded. Although every case will turn on its own facts, charities should take comfort from the fact that courts remain willing to uphold testamentary wishes and protect charitable beneficiaries from the costs and consequences of unreasonable conduct by others.